Dear AMAC,
I am considering enrolling in a Medicare Advantage plan when I begin Medicare but there is one aspect I cannot wrap my head around- the Maximum out of Pocket. Is this a deductible I pay before the plan kicks in? If so, this large amount would really put a dent in my finances.
-Carol (St. Augustine, FL)
Dear Carol,
The Maximum Out-of-Pocket (MOOP) is an annual cap on how much you pay for your medical expenses. Once you reach this limit, you will pay nothing for covered services for the remainder of the year. It’s not a deductible, but more like a safety net for the consumer. Now, each plan can have a different limit, and that limit can change each year. You should consider this when choosing a plan.
Keep in mind that after your reach your deductible (if your plan has one), you are only paying a portion of your costs until you reach the Maximum-Out-of-Pocket. Copayments and coinsurances are the part you pay on your end after the plan pays their portion. Some people may never meet their MOOP unless something catastrophic happens.
In 2021, the MOOP for Medicare Advantage Plans was $7,550, but some plans may set lower limits. If you choose a PPO, your plan may set two annual limits on your out-of-pocket costs. One limit is for in-network costs and the other is for combined in-network and out-of-network costs. PPO plans usually have a higher MOOP that can be as high as $11,300 for out-of-network services.
It is important to remember that your monthly premiums do not count towards the MOOP. Also, drug deductibles and copayments will not count, and neither will services like routine dental, vision, or hearing.
I hope this helps clear up the Maximum-Out-of-Pocket mystery for you, Carol.
Sincerely,
Your Medicare Advisor
If you would like to review specific plan options, our licensed agents here at AMAC would be happy to assist you. They are licensed with top-rated insurers throughout the country.
Call 1-855-611-4856 or request a quote below!
If the $7,500 annual Medicare Advantage out-of-pocket limit is higher than you want to risk, you could instead choose original Medicare and purchase a Medicare Supp. (Medigap) plan on top of the original Medicare plan to lower your out of pocket risk.
Medicare Supp. “Plan G (High Deductible)” has the lowest premium of the various Medicare Supp plans with this year’s high deductible set at $2,490. If that amount is still too high, there are richer Medicare Supp plan available at higher premiums with lower out of pocket risks.
At least you have options if you don’t like either the network requirements of Medicare Advantage plans or their $7,500 annual out-of-pocket limit.